Data Security Operator Varonis Set for a Sizzling IPO

Varonis helps companies automate a tough process

Varonis, which develops software for data protection, has filed for an IPO. It plans to list on the Nasdaq under the symbol of “VRNS. Lead underwriters include Morgan Stanley (MS), Barclays (BCS), Jefferies and RBC Capital Markets.

And considering strong deals from Splunk (SPLK) and FireEye (FEYE), the Varonis IPO should have little trouble ginning up investor interest.

Tech veterans Yaki Faitelson and Ohad Korkus founded Varonis back in 2005, seeing a big opportunity to build a system that would allow companies to monitor access to sensitive data. For the most part, the traditional approach was manually intensive and fairly complex.

With Varonis, a company can map the unstructured data of an enterprise, such as spreedsheets, word processing documents, emails, texts and presentations. Often such content has propriety information that should remain protected. So with Varonis, it’s much easier to identify sensitive information as well as tracking the usage — both authorized and unauthorized.

It’s not an easy problem to solve. Based on a study from IDC, the amount of digital data created and replicated in 2012 exceed 2.8 zettabytles, or trillions of gigabytes. The firm predicts that this will grow an annual compound rate of 39% until 2020. About 90% of this will be unstructured data.

As should be no surprise, Varonis has been ramping at a nice clip. From 2010 to 2012, revenues jumped from $28.9 million to $53.4 million. Meanwhile, losses have been reasonable, coming to $4.8 million last year.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.